2014 Employment Law Year in Review

December 22, 2014

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The holiday season is upon us, and it will soon be the New Year. Reflecting back on 2014, it has been an interesting year for employment law in Ontario and across Canada. We have seen many changes to the employment law landscape, including recent legislative changes and court decisions that will have far reaching consequences for employer-employee relationships in Canada going forward.

Here are some key developments that everyone should be aware of:

Legislative changes:

On November 20, 2014, Bill 18 received Royal Assent, meaning that significant changes to the Employment Standards Actand other employment legislation will come into force in early 2015, including:

Stronger protection for temporary foreign workers;

Removing the $10,000 cap on recovery for unpaid wages through a Ministry of Labour Complaint;

Ensuring that minimum wage reflects inflation;

Extending the definition of “worker” under the Occupational Health and Safety Act to include co-op students, trainees and other unpaid workers, meaning these types of workers are now protected under this Act; and

Requiring employers to provide information from the Ministry of Labour to employees regarding their employment law rights.

Caselaw Updates:

Human Rights Decisions

This year, there were several significant human rights decisions, which will drastically impact both employee rights under human rights legislation, and the employer’s obligation to accommodate:

McCormick v. Fasken Martineau DuMoulin LLP, 2014 SCC 39: the Supreme Court decided that an equity partner at a law firm is not an employee for the purposes of the British Columbia Human Rights Code. The partner alleged that the firm’s mandatory retirement policy was discriminatory, while the firm argued an individual must be an employee in order to in order to bring a complaint under the Code and a partner is not an employee. The Court applied the “control and dependency” test to determine whether or not the partner was an employee, concluding that this particular partner was not subject to the control nor was he dependent on the employer, and therefore was not an employee. Therefore, the partner could not bring a human rights complaint against his firm.

Canada (AG) v. Johnstone, 2014 FCA 110: the Federal Court of Appeal set out the approach for dealing with child care obligations under the family status provisions of the Canadian Human Rights Act. The Court held that in order for a claimant to make a prima facie case of discrimination based on family status (which triggers the employer’s duty to accommodate) the claimant must show:

That the child is under his or her care and supervision;

That the childcare obligations at issue engage the individual’s legal responsibility;

That he or she has made reasonable efforts to meet those childcare obligations through reasonable alternative solutions, and that no such alternative solution were reasonably accessible; and

That the impugned workplace rule interferes in a manner that is more than trivial or insubstantial with the fulfillment of the childcare obligation.

Canada (HRC) v. Canada (AG), 2014 FCA 131: the Federal Court of Appeal concluded that employers only have a substantive, and not a procedural duty to accommodate an employee with a disability. In this case, a Canadian International Development Agency (CIDA) employee had Type 1 diabetes, and wanted to be posted to a position in Afghanistan; however she could not pass a medical assessment because of her diabetes. While the employee agreed that it would cause CIDA undue hardship to post her to Afghanistan, she argued that CIDA nonetheless breached its procedural duty to accommodate because it did not consider all possible accommodation measures. However, the Federal Court of Appeal disagreed, finding that an employer only has a substantive, and not a procedural duty to accommodate.

Other Decisions:

Québec (Commission des normes du travail) v. Asphalte Desjardins inc, 2014 SCC 51: the Supreme Court held that when an employee gives notice of an intention to resign (here it was in three weeks) and the employer decides to terminate the employee immediately instead, the employer is required to give the employee notice up until the actual resignation date. Note that the Supreme Court decided this case under the Québec Civil Code,therefore it is difficult to tell what impact, if any, it will have on employment law in Ontario.

Hryniak v. Mauldin, 2014 SCC 7: the Supreme Court expanded the use of summary judgement motions as a way to expedite litigation. While this was not an employment law decision, it has already had far reaching consequences in employment law, as many plaintiffs have used the summary judgement procedure as a way of expediting their claims for wrongful dismissal without going to trial. For example in Arnone v Best Theratronics Ltd., 2014 ONSC 4216 the Superior Court of Justice awarded summary judgment in favour of the employee, finding that the summary judgment procedure is the appropriate and optimal way for parties to proceed in reasonable notice cases.

Farwell v. Citair Inc (General Coach Canada), 2014 ONCA 177: the Ontario Court of Appeal upheld a finding that an employee was constructively dismissed when he was demoted from VP of Operations to Purchase Manager, because the demotion involved a significant change in responsibilities and duties, reflected a title with a diminished role in the company, and that the role was of lesser prestige. In coming to this conclusion, the Court commented on whether an employee who is constructively dismissed is required to accept the lesser position in order to mitigate their damages. The Court concluded that absent a work atmosphere that is hostile, embarrassing, or humiliating, an employee is required to mitigate his or her damages by accepting the diminished role, but, the employer must make a clear opportunity to accept the role after the employee alleges he or she has been constructively dismissed, which the employer in this case did not do.

Bhasin v. Hrynew: the Supreme Court of Canada recognized a new general organizing principle of good faith in Canadian common law, as well as a corresponding duty of honest contractual performance. The Court found that this broader principle was needed to make the common law more coherent, predictable and just. Prior to Bhasin, the approach to good faith performance of contracts was unsettled, and limited to particular types of contracts such as employment contracts. The Court chose to adopt a flexible approach with respect to good faith, which recognizes the importance of the general principle without displacing existing contractual law. While the Court viewed the decision as a modest, incremental step, it will have a significant impact on contractual law in Canada going forward, providing increased certainty for parties to commercial contracts. Employers should be mindful of their duty of good faith and honesty in performing employment contracts, from the time of negotiation forward, and not simply at the time of dismissal.

From all of us in the Employment Law Group at Nelligan O’Brien Payne LLP, we wish you happy holidays, and look forward to you revisiting our blog in the New Year!